Time to revisit vacation rental coverage

Now that Labor Day has wrapped up the last official weekend of the summer season, owners will begin to review how they can improve their vacation rentals for next year's guests.

Often on the list is the best way to insure any accidents that might occur, including those that might include the loss of prime rental dates.

"It is a common misconception among owners that their vacation rental homes are adequately covered by traditional second-home insurance policies," said Scott Wolf senior vice president of CBIZ Insurance Services, Inc.

CBIZ has partnered with HomeAway, a leader in online vacation rentals, to offer members a plan that would cover the homes they rent out and the people who use them. Annual polices range from $500 to $3,000 a year, depending upon the size of the unit and number of guests. Consumers do not have to be a HomeAway member to subscribe to the CBIZ coverage.

The program, HomeAway Assure, not only covers theft, damages and injuries, but also protects against lost income if your home is deemed unable to rent due to an occurrence such as a natural disaster.

"Vacation rental owners have such a strong, personal connection with their homes," says Brian Sharples, chief executive officer of HomeAway. "It's important for us to offer an insurance product that helps protect our customers' properties and preserve the vacation experience they share with their guests."

The vacation rental industry continues to thrive. More and more owners are operating small vacation home businesses - especially in retirement. They are finding that even in a down economy, families often find a way to get away. The "staycation" philosophy rarely lasts longer than one year; people tend to invest in family vacations and reunions consistently - even if for shorter periods of time.

Maura Paler, a vacation rental owner who also books other properties for friends and business associates, opted to take the Home Assure program and pay the $1,200 annual premium on her $300,000 property because of the price and coverage.

"Quite frankly, I couldn't get insurance agents to agree on what was covered and what wasn't under my homeowners policy," Paler said. "It greatly concerned me because some said 'yes' and others were absolutely certain I would not be covered if I rented it to others. What this plan offered was half as expensive, or less, than the other coverages that I found."

Wolff said vacation rental coverage is not new but CBIZ has had difficulty reaching groups large enough to offer a significant discount on a normal individual policy.

"We've been offering the coverage for seven years," Wolf said. "But the industry has been so fragmented that spreading the word had become a challenge. By teaming with HomeAway, we're able to hit a lot of people in the business that would have taken us a long time to find on our own."

The coverage for rental time lost usually must be exclusive to the home. For example, the oil spill in the Gulf of Mexico would not automatically trigger a claim for all beachfront owners in the region. A forest fire could possibly qualify, but only if the local jurisdiction closes local roads leading to your home.

"One of the things that is covered," Paler said, "is that if my house burns down, I'd be eligible for two years' loss of rental time. That's comforting, especially when you are in this business."

Vacation owners usually "cover" the basics but they often fail to revisit the big picture. It's often easy to rent out a lakefront property or a wonderful getaway at the beach. In fact, some owners say the vacation rental market has been so strong that they could have booked their homes three times the number of weeks they had available.

What many owners have not done, however, is ensure that all parties are properly covered in the event something goes wrong. A little extra research and additional insurance coverage can go a long way to providing financial assistance and peace of mind.

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